On 7 March 2016, EU Commissioner Miguel Arias Cañete, responsible for Climate and Energy, together with Swedish Energy minister Ibrahim Baylan, visited Fortum Värme’s soon-to-be-commissioned biomass-fired CHP-plant in Värtan, Stockholm. They combined a tour at the plant with a round table discussion on common sustainability criteria for bioenergy, and the European power market design. During the meeting, Fortum also addressed the need for more ambitious targets, a revision of EU-ETS, a Union-wide phase out of subsidies and reforms to allow customer-driven services and solutions.
- From our perspective, forest-based biomass is the main alternative to fossil fuels in Finland and Sweden. Sustainability criteria should target the origin of the bioenergy, regardless of its end use. This has advantages for all sectors using forest biomass, says Esa Hyvärinen, Senior Vice President, Corporate Relations at Fortum.
The energy sector today is under pressure due to low electricity and commodity prices and an increasing tax burden. Efforts to review and change the regulation ahead the Energy Union are now fully underway providing good opportunities to revise the regulations that distort market-based development of the European energy sector.
Fortum sees many positive effects of the Energy Union - a larger market provides a better security of supply through better integration of weather-dependent electricity generation. However, improving transmission capacity within the Union is not enough to create a well-functioning Energy Union – it also requires harmonisation of policies and regulations.
-The market design will be crucial. A market-based energy-only model requires a level playing field, i.e., a phase out of subsidies to enable renewables to be fully integrated and disruptive taxes and regulations dismantled, says Esa Hyvärinen.
- Fortum also encourages the EU to specify its existing long-term target to a 95% emissions reduction by 2050 to reflect the Paris Agreement’s goal to reach the 1.5 degree target. Based on this long-term goal, the EU must also establish a cost-efficient emissions reduction path with several milestones. The opportunity to address these issues to Commissioner Miguel Arias Cañete has been valuable, Esa Hyvärinen concludes.
Image: Cañete and Baylan at Fortum